. . .

Senior Employment Law Expert welcomes tribunal ruling on CEO Behaviour

A leading North Wales Employment Law Solicitor has welcomed a tribunal ruling earlier this month which saw Mike Shearwood, ex-CEO of shoe manufacturer Clarks lose his claim for unfair dismissal.

Ian Winrow, Senior Partner at Winrow Solicitors in Caernarfon says that employees often wrongly assume that codes of conduct do not apply to senior executives.  Ian, who is also the Head of The Employment Law Masters programme at Bangor University, says:

“Company policies apply to everyone and if executives breach the company’s Code of Conduct, they are subject to the same disciplinary procedures as everyone else.”

The former CEO had brought a claim for unfair dismissal, claiming he was asked to resign in June 2018 after threatening to disclose the state of the company’s finances to shareholders.

However, during the Tribunal, these allegations were challenged and the Tribunal dismissed Shearwood’s claims of protected disclosures after hearing evidence that these disclosures were already in the public domain and the information was accessible by anyone.

Board members and other witnesses gave evidence that Shearwood was asked to resign after serious allegations of inappropriate workplace language and conduct by the former CEO.  They made the decision to ask for his resignation following an internal enquiry, which was triggered after senior employees had brought a number of serious and significant incidents to their attention.  The Tribunal heard evidence that Shearwood had described a Clarks client as a “f***ing faggot”, on another occasion had referred to another employee as “hot” and had made inappropriate comments relating to what he called “violent blacks”.

Some of these comments had been made while Shearwood was working in the US. A senior employee testified that “a large portion of the region had been exposed to his inappropriate behaviour”, and two female employees had indicated that they would consider leaving the company if Shearwood had remained in post.

Judge Derek Reed said he was satisfied that “very serious allegations” had been made against the former CEO and that the company were right to ask for his resignation, saying:

“It’s obvious why the respondent regarded these matters as serious.

“Mr Shearwood was the Chief Executive and these allegations had occurred in America and they were clearly concerned about the prospect of damaging the company’s position in the US… they were also concerned about the possibility of employees leaving if these matters were not resolved.

“It seems to us that it is overwhelmingly likely the real reason for Mr Shearwood’s dismissal was the contents of the report into the allegations.

“In other words, the reason for his dismissal was not as he asserted because he had made protected disclosures.”

Shearwood denied the allegations, however his unfair dismissal claim was dismissed by the Tribunal.  A Clarks spokesperson welcomed the result, saying:

“We stand by our decision in relation to Mr Shearwood’s departure and are pleased to see the tribunal rule in our favour. We made it clear at the time of Mr Shearwood’s resignation that we would make no further comment on the particulars of his conduct and intend to maintain that stance.

“Clarks was founded on principles of integrity, equality, and community almost 200 years ago, and these values continue to underpin everything we do as a business.”

Ian Winrow is an expert on discrimination law and says the message will send a positive message to employees experiencing discrimination, unacceptable comments or unfair treatment in work from senior executives where they may previously have felt powerless to report unacceptable behaviour:

“The message from this tribunal is resoundingly clear – officers within any organisation are expected to behave in accordance with company codes of conduct in the same way as ordinary employees and can be dismissed or asked to leave without a golden handshake or settlement agreement if they fail to do so.

“Our advice to employees who feel uncomfortable over comments made by managers or senior officers is to raise their concerns in accordance with their workplace grievance policy, and if are unhappy with the outcome, to seek legal advice. We can also help ex-employees who feel they have experienced workplace discrimination or unfair dismissal.”

Ian added:

“The case is also a good example of why every employer, large and small should have robust HR policies including a clear code of conduct, which protects employers if an employee is dismissed for unacceptable behaviour in the workplace.  Setting out clear guidelines for behaviour within your employee handbook means that cases like these are often clear cut.

“We are currently offering a free HR policy review for employers in North Wales, so it’s a good time for employers to make sure their employee handbook is up to date.” 

To learn more about Winrow Solicitors, please visit: https://www.winrowsolicitors.co.uk